Steven Law heads American Crossroads, a conservative super PAC funding many anti-Obama ads now on television. (Susan Biddle/For The Washington Post)

By T.W. FarnamOctober 30, 2012

After more than a decade working side by side, the two men rarely talk these days. But Senate Minority Leader Mitch McConnell and Steven Law, his trusted former aide, remain a powerful combined force in Washington.

Law heads American Crossroads and Crossroads GPS, conservative groups whose $300 million budget has allowed them to outspend every other interest group in this election, as well as the Democratic National Committee. Together, the two groups have matched the Romney campaign in running anti-Obama ads, and in the past two months, they have put $35 million into 10 Senate races around the country — more than the Republican Party itself.

If things go his way, Law could deliver control of the Senate to the Republicans and their leader, McConnell. It would be a fitting outcome for the two, who have spent their careers in part shaping the rules governing how money is spent in politics.

Helped by two Supreme Court rulings, their efforts have led to this moment in politics — an election defined by huge spending and anonymous donors.

In the 1990s, McConnell and Law vigorously fought efforts to limit campaign spending and to finance campaigns with public dollars. For years, they have raised and spent large donations known as soft money, together in the Senate and for Law, at the U.S. Chamber of Commerce and now Crossroads.

Filling the Senate majority leader post would satisfy a long-held ambition for the Kentucky Republican, who single-handedly boosted Law from unpaid intern to campaign manager, chief of staff and then Republican Party official, easing his way to the top of Washington’s highest power circles.

“Most of what I’ve learned about politics I learned from him,” Law, 52, says of his mentor.

Now, McConnell, 70, is taking the lead in preventing Democrats and government regulators from cracking down on Law’s group, which has thrived under rules allowing its donors to remain secret.

Democrats, too, have taken advantage of the loosened fundraising environment. After sitting out 2010, liberals organized a trio of political groups that have raised a combined $122 million so far this election cycle.

But no other group has come close to matching Crossroads.

Obama and others have vocally criticized the secrecy of Republican groups such as Crossroads GPS, saying wealthy donors and corporations — including one $10 million donor — are swaying the election without allowing public scrutiny.

“Voters have a right to know who is spending millions of dollars to try and influence their vote,” said Rep. Chris Van Hollen (D-Md.), who has led the fight in Congress to force groups to disclose donors. “Having shadowy groups influence our elections undermines the strength of our democracy.”

McConnell, a featured speaker at two Crossroads fundraisers this year, has become not only a beneficiary of the secret donations, but also their biggest defender.

He has consistently used his Senate post to block Democratic efforts to force groups such as Crossroads GPS to disclose donors, arguing that liberals are using disclosure as a “political weapon” that would curtail free speech. He contends that contributors should be allowed to give anonymously to avoid attacks by opponents.

“We’ve seen the way a hostile administration can intimidate people and try to remove them from the political playing field,” he said.

Under different circumstances, McConnell has been an advocate for disclosure. In the early 1990s, while Law was his chief of staff, McConnell pushed for a ban on political action committees, which favored Democrats at the time. And he wanted to bar soft money, the type of funds Law now collects at Crossroads.

“Soft money is a problem because it is unlimited and undisclosed to the public, yet it can play a decisive role in elections,” McConnell wrote in a 1993 opinion page article. “All campaign spending should be on top of the table where voters can see it.”

McConnell says he was supporting disclosure to candidates and parties, a position he still holds, but not for groups like Crossroads GPS that operate outside the party structure.

Longtime colleagues

In McConnell’s efforts to shape the money rules over time, Law has often been at his side.

Law had been answering mail on the Hill in the late 1980s, just out of Columbia Law, when McConnell hired him as a legislative aide working on, as Law put it, “the beginning of the campaign finance wars.”

“It took me about a year to figure out he was the smartest guy on the staff,” McConnell said.

McConnell named Law to manage his 1990 reelection effort, although Law had never worked for a campaign and his only management experience was running a restaurant one summer during college.

After a close race, which McConnell won, the two went on to lead a fight against Democratic proposals for campaign spending limits and public funding.

When McConnell became chairman of the National Republican Senatorial Committee in 1997, Law served as executive director, where he said he “learned the craft” of running a large political operation. After two election cycles in that job, however, McConnell said he was at a loss: “I didn’t have any more jobs to give him to keep him moving up.”

But there was an opening with McConnell’s wife, then-Labor Secretary Elaine Chao, who hired Law as her first chief of staff. He later became deputy secretary, where he helped pass regulations requiring more transparency from unions on their finances, including their political spending for Democrats.

In 2007, he moved to the private sector, joining the U.S. Chamber of Commerce as its general counsel, earning $845,000 a year. (He now earns $600,000 at Crossroads.) He took the lead in helping the Chamber raise more than $10 million to stop what was seen as a serious threat to business and Republicans, a labor push to ease the rules on forming unions.

At the time, the Chamber was expanding to become the lobbying and campaign behemoth it is today, spending millions in undisclosed corporate money to help pro-business, mostly Republican congressional candidates.

Joining forces with Rove

In the fall of 2009, Law pitched an idea to former RNC chairman Ed Gillespie over lunch at the Mayflower Hotel: a new conservative group to boost Republican candidates and counteract better-organized liberal players such as MoveOn.org.

“I could just see the need,” Law said. “What I didn’t know was that at the same time while I had the faintest outline of this idea, Karl Rove already had a fairly detailed blueprint that he was building the architecture for.”

Gillespie was already working with Rove, the former political adviser to President George W. Bush, and together they formed the group they named American Crossroads. They chose Law to run it.

Just as Crossroads was getting off the ground, the Supreme Court handed down a gift: the landmark Citizens United v. Federal Election Commission decision that stripped away limits on election spending by corporations, unions and nonprofit groups such as Crossroads GPS, allowing them to expressly urge voters to oppose or support certain candidates.

Law said the ruling served as “a Good Housekeeping seal of approval for nervous general counsels” at corporations considering donations.

For the 2010 elections, the Crossroads groups raised a combined $71 million, helping Republicans pick up 63 House seats and take control of the chamber.

Crossroads GPS has been the subject of several complaints filed by activists who have argued to the IRS that the group is a partisan outfit masquerading as nonprofit solely to keep its funders anonymous. And Democratic members of Congress have joined the fray, urging the IRS to limit the amount that such nonprofits can spend on politics.

The IRS, which reviews groups on a case-by-case basis, has not yet approved nonprofit status for Crossroads GPS.

The agency has been reluctant to weigh in on political matters, and in an official response, said it was aware of “public interest” in the issue.

That was enough to prompt McConnell and other Republican senators to warn the officials “to resist allowing the IRS rule-making process to be subverted to achieve partisan political gains.”

McConnell argues that the proper venue to shape the rules is in Congress, where Democrats will have to find the votes to overcome his objections.

“One of the things I learned from Senator McConnell is the power of simplicity and consistency,” Law said. “There’s tremendous power in Washington to being the immovable object.”

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